The C-suite has often proved the bellwether of a topic’s importance to a financial organisation’s bottom line. Data is one area that is rapidly gathering momentum and is not about to go away. In fact, it’s going to get bigger and bigger as the world produces more and more data.
CMOs were invited to join their CFO and COO counterparts, as reputation and brand became seen as core assets. The same applied to the CROs who were asked to sit at the big table and reinforce their organisations’ approaches to risk and compliance.
Today, as clean and accurate data management and analysis has become seen as key to realising business benefits in what the UK Government has described as the new information economy, the CDO, or chief data officer, has become the latest addition to the ranks of the boardroom elite.
According to Gartner there were over 100 CDOs (carrying that actual job title) serving in large enterprises in 2013 – more than double the number in 2012. And these changes are not restricted to the private sector – Gartner has also predicted that by 2014, more than 10 per cent of government organisations will have appointed a CDO.
However, while an effective CDO can bring economic value to a business by instigating big data best-practice, they must demonstrate both heightened business acumen and diplomacy to be able to leverage their position for the good of the business.
Since the global financial crisis, a step-change has occurred in the number
s of CDOs working at the highest levels of financial services organisations. As their companies have recognised the growing volumes of data (customer, reference, market and more) being generated and stored, CDOs have been drafted in to help meet compliance and regulatory requirements.
>See also: The rise and rise of the Chief Data Officer
At the same time, if harnessed properly, this data can provide insight into customer preferences, supporting targeted customer service activities. This focus on creating value through harvesting of data and knowledge coincides with a drive across many organisations to consolidate and streamline their IT systems and reduce operational costs.
As data storage has become cheaper than ever, it would appear that the sky is the limit in terms of the data that can be held and analysed. This however increases the challenge of ensuring it is being efficiently managed and harnessed.
With this new focus on unlocking the inherent value of data, CDOs are now in a position to transition their roles. Whereas initially tasked with focusing purely on technology and managing data, well-skilled CDOs are now dialling up their activities, and aligning their objectives closely to the business’ overall strategic direction to drive enterprise-wide data projects.
This often entails overcoming an organisation’s legacy data management solutions, which can pool data into strictly siloed data sets, owned by different parts of the business and difficult to re-channel.
In addition, to lead a holistic and efficient data approach, many CDOs will face what could be referred to as the ABC challenge. This requires bringing together and marshalling the strength of the analytical, business and computing functions within an organisation, which typically work separately to achieve different business goals.
>See also: Do you really need a chief data officer?
Forward thinking financial organisations such as Riyadd Bank have created centres of competence to bring together one team focussed on exploiting data through analytics. The UK financial services industry is seeing this approach as an early step to drive cultural use of information.
Advocacy is a key skill that can enable the dynamic CDO to progress these value-generating projects. This advocacy can be deployed both at a business level to ensure buy-in from functions with competing objectives, but also at the upper levels of an organisation to proselytise about the value of data.
To be effective in their use of this skill, CDOs need to underpin it with a true in-depth understanding of the business and its requirements, so they can report back to the C-suite effectively.
They will gain real influence by demonstrating the impact well-managed data can have on revenue. This can be a tricky task as senior management will typically fear wasted investment if projects are too ambitious or seek to meld together disparate strands of the business.
The senior team may also lack understanding of the value or the complexities of data, and may have concerns that data projects take too long and cost too much.
These challenges may seem insurmountable. However, successful CDOs are increasingly drawing on a range of skills, both technical and interpersonal, to achieve their goals of bringing data to the heart of the business.
Is it too much to expect a CDO to master the business, the data and the soft skills necessary to command multiple stakeholders? In some cases, yes! For this reason, some organisations that have struggled to find a single person with all the various skills required to excel as a CDO have created teams of data experts who can report to key decision makers.
By harnessing a broad range of technical and interpersonal skills – whether through CDOs or combined data teams – the opportunity is there for organisations to harness enterprise-wide data and gain a commercial advantage over their competitors.